Stocks rally a day af­ter Trump win

It turns out that Pres­i­dent Don­ald Trump may not be bad for the stock mar­ket af­ter all.

Asian stock mar­kets stum­bled shortly af­ter Trump over­took Hil­lary Clin­ton in the pres­i­den­tial vote count early Wed­nes­day. From there, Wall Street ap­peared set for a slump of its own, only it never ma­te­ri­al­ized.

And de­spite wa­ver­ing in the first hour of trad­ing, US stocks ral­lied the rest of the day, lift­ing the Dow Jones in­dus­trial av­er­age within 50 points of a record high close.

“He took on a re­mark­ably con­cil­ia­tory pos­ture,” said Eric Wie­gand, se­nior port­fo­lio man­ager at the Pri­vate Client Re­serve at US Bank. “That went a long way to demon­strat­ing, per­haps for the first time or very few times, his pres­i­den­tial dis­po­si­tion, and gave a greater sense of calm. That’s what had an early re­prieve in the mar­kets.”

The Dow ul­ti­mately climbed 256.95 points, or 1.4 per­cent, to 18,589.69. The av­er­age was briefly up 317 points.

Wall Street had largely seen Clin­ton as more likely to main­tain the sta­tus quo, while view­ing Trump’s po­lices as less clear. In­vestor anx­i­ety ratch­eted up in re­cent weeks as the race tight­ened, lead­ing to a nine-day slump for the mar­ket that ended Mon­day. By Election Day, the mar­ket had mostly bounced back and priced in a Clin­ton win.

On Wed­nes­day, faced with a pres­i­dent-elect Trump, traders piled into health care and fi­nan­cial stocks — sec­tors seen as likely to strug­gle un­der a Clin­ton ad­min­is­tra­tion. They also sold off safe-haven stocks like util­i­ties and con­sumer-fo­cused com­pa­nies.

Fi­nan­cial com­pa­nies led the gain­ers, surg­ing 4.1 per­cent. Banks and other fi­nan­cial stocks tend to ben­e­fit from higher in­ter­est rates and less gov­ern­ment reg­u­la­tion, two things in­vestors an­tic­i­pate could hap­pen dur­ing a Trump pres­i­dency.

Health care com­pa­nies climbed 3.4 per­cent. The sec­tor has taken a beat­ing this year, re­flect­ing in part fears that a Clin­ton pres­i­dency would lead to curbs on drug pric­ing in­creases that could hurt drug­mak­ers and biotech­nol­ogy com­pa­nies.

Util­i­ties were down the most, slid­ing 3.7 per­cent, fol­lowed by con­sumer-fo­cused stocks, down 1.3 per­cent.

Bil­lion­aire in­vestor Carl Ic­ahn was among those who seized on Trump’s win to play the mar­ket. The bil­lion­aire told Bloomberg that he put about $1 bil­lion “to work” on stocks early Wed­nes­day.

In­vestors hope Trump plans for in­fra­struc­ture spend­ing, tax cuts and lighter reg­u­la­tion will ben­e­fit the economy. They ex­pect those spend­ing plans will call for is­su­ing more debt.

A sell-off in bonds sent prices tum­bling, driv­ing the yield on the 10-year Trea­sury note up to 2.08 per­cent from 1.86 per­cent late Tues­day. That’s the high­est the rate has been since Jan­uary. That yield is a bench­mark used to set in­ter­est rates on many kinds of loans in­clud­ing home mort­gages.

Traders are sell­ing bonds to hedge against the pos­si­bil­ity that in­ter­est rates, which have been ul­tra-low for years, could rise steadily again un­der a Trump ad­min­is­tra­tion, said Tom di Galoma, manag­ing direc­tor of trad­ing at Sea­port Global Se­cu­ri­ties.

“Peo­ple are start­ing to be­lieve that Don­ald Trump is good for the economy,” di Galoma said.